Telehealth company Teladoc saw revenues jump 43% in the first quarter to $128 million in the first quarter of 2019, up largely due to increasing volumes, officials said upon releasing their earnings on Tuesday.
During their quarterly earnings call on Tuesday with analysts, Teladoc CEO Jason Gorevic said it was the first quarter that the company's visit volume exceeded 1 million. Total visit volume in 2018 was 2.6 million.
In all, total virtual visits increased by 75% to 1.06 million visits compared to the first quarter of 2018.
Gorevic said first-quarter 2019 results exceeded expectations and "set a very positive tone for the year." Strong visit volume in the first quarter of this year was driven by the company's diversified strategy and a strong tailwind from mainstream adoption of telehealth services, he said.
"The strong revenue and visit momentum during the quarter underscores the accelerating pace of adoption across our portfolio of clinical services and diversification of our business. As we exit the quarter with a robust pipeline, continued international expansion, and favorable Medicare Advantage regulation, I am more confident than ever that we are uniquely positioned to capitalize on the enormous global market opportunity for virtual care," Gorevic said.
Revenue from U.S. subscription fees in the U.S. in the first quarter increased 33% compared to a year ago and international subscription fees rose by 133% year over year. The company ended the quarter with 26.7 million paid members, up 28% compared to the first quarter in 2018.
Teladoc senior vice president, chief accounting officer, and controller Gabriel Cappucci reiterated that the company expects to be cash flow positive for the first time later this year.
Still the company's net loss grew in the first quarter of 2019, from a loss of $10.8 million in the first quarter of 2018 to $13.3 million in the past quarter, or a net loss per diluted share of $0.43 in the first quarter of 2019, up from $0.39 in the first quarter of 2018, Teladoc has yet to turn a profit and still has sizable net losses—$97.1 million for the full year in 2018. The company forecast a net loss per share to be between $1.52 and $1.66 for 2019.
The company plans to make strategic investments in 2019 to support its growth as virtual care overall is poised for continued growth buoyed by regulatory and market changes.
And, health plans are beginning to leverage telehealth as a way to reduce healthcare costs. Last week, Humana announced it is teaming up with telehealth company Doctor on Demand to launch a new virtual primary care model. Called On Hand, the plan gives patients access to a dedicated primary care physician as well as access to preventive care, urgent care, and behavioral health through video visits with lower monthly premiums.
In response to an analyst's question, Gorevic said Teladoc is having discussions with some health plans about virtual-first plan designs.
"Most of those plans look at telehealth as a lever to reduce premiums by, number one, resolving patient issues in a more cost-effective setting, in a virtual setting, and number two, using virtual care to better utilize all the rest of the tools in the health plan arsenal, such as tiered network programs and getting people earlier into disease management programs," he said.
A recent policy change by the Trump administration for Medicare Advantage plans is expected to open up new opportunities for telehealth companies. Medicare Advantage (MA) plans will be able to add additional telehealth benefits starting in plan year 2020 under a final rule announced by the administration earlier this month.
However, Gorevic told analysts he does not expect the majority of MA health plans to quickly add telehealth benefits beginning in 2020
"We have a head start with 40 health plans that we already work with and we are actively in discussion with many MA health plans, both existing clients and prospects. I’m realistic about the pace of adoption of the health plans with respect to anything, much less virtual care for an MA population," Gorevic said. "We’ve primed the pump with all of our work with the commercial plans and many of those plans have MA plans. I would expect it to be a gradual roll out over maybe three years."
The company continues to consolidate its share of the telehealth market with a particular focus on international markets. Teladoc acquired Paris-based telemedicine provider MédecinDirect in March and Spain-based Advance Medical last year. The company also recently expanded its telehealth services to Canada.